PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT
              _______________

                   No. 15-1264
                 _______________

    IN RE: IN THE MATTER OF THE GRAND
      JURY EMPANELED ON MAY 9, 2014

               John Doe; ABC Entity,

                                    Appellants
                 _______________

   On Appeal from the United States District Court
          for the District of New Jersey
         (D.C. Civil No. 2-14-mc-00062)
         District Judge: Hon. Esther Salas
                 _______________

               Argued April 21, 2015

BEFORE: FISHER, CHAGARES AND COWEN, Circuit
                   Judges

               (Filed: May 15, 2015)
                 _______________

                    OPINION
                 _______________
Damian P. Conforti, Esq. (Argued)
Podvey, Meanor, Catenacci, Hildner,
Cocoziello & Chattman
One Riverfront Plaza
Suite 800
Newark, NJ 07102

Nancy A. Del Pizzo, Esq.
Rivkin Radler
21 Main Street, Court Plaza South
First Floor – West Wing, Suite 158
Hackensack, NJ 07601

      Counsel for Appellants

Mark E. Coyne, Esq.
John F. Romano, Esq. (Argued)
Office of the United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102

      Counsel for Appellee

COWEN, Circuit Judge.

      John Doe, D.O., a medical doctor, and ABC Entity, (the
“Corporation”    or     “Medical     Practice”),   (together,
“Appellants”), appeal the District Court’s order holding the
Corporation in contempt for noncompliance with a grand jury


                               2
subpoena directing its custodian of records to produce certain
documents.       Doe claims that despite serving as the
Corporation’s custodian, as the sole owner and employee, he is
entitled to refuse to comply with the subpoena in accordance
with his Fifth Amendment privilege against self-incrimination.
Appellants also argue that compliance is unnecessary because
the subpoena is impermissibly overbroad and should be
quashed. For the reasons discussed below, we will affirm the
District Court’s order.

                              I.

        In 1973, Doe, the only medical practitioner in his
practice, organized his medical practice as ABC Entity, a
“professional association,” which is a type of corporation
doctors are permitted to form under New Jersey law. Since its
creation, Doe has operated his practice through that corporate
entity. As of October 2011, the Corporation employed a staff
of six.

        The original target entity (the “OTE”) was a clinical
blood laboratory in New Jersey. From 2006 through 2013,
this entity used various methods to bribe numerous physicians
to refer their patients to it for blood testing. The Government
alleges that Doe entered into an illicit agreement with the
OTE, whereby it paid him monetary bribes in exchange for
referring his patients to it for blood testing.

       In April 2013, a grand jury subpoena was served on the
custodian of records for the Corporation, directing it to turn
over various documents, including records of patients referred


                              3
to the OTE, lease and consulting agreements, checks received
by it for reasons other than patient treatment, correspondence
regarding its use of the OTE as a blood-testing provider,
correspondence with specified individuals and entities, and
basic corporate records. In December of 2013, Doe, as
custodian, moved to quash the subpoena. The Government
opposed the motion, and the District Court denied the motion
to quash, concluding (1) that Supreme Court precedent
indicated that corporations may not assert a Fifth Amendment
privilege, and (2) that the subpoena was not overbroad in
violation of the Fourth Amendment.

       Following the District Court’s denial of his request to
quash, Doe refused to let his corporation comply and the
Government moved to compel it to do so. The District Court
granted that motion. The Corporation persisted in its refusal to
comply and the District Court found it in civil contempt and
ordered it to pay a $2,000 per day sanction. The Court,
however, agreed to stay execution of the fine pending an
expedited appeal before this court.

       Just days before filing their opening brief, Appellants
informed the Government that the Corporation had fallen on
hard financial times and fired all of its employees other than
Doe. In their place, it hired independent contractors to assist
Doe in operating his medical practice. Among other duties,
the independent contractors were tasked with “[m]aint[aining]
accurate and complete medical records, kept in accordance
with HIPAA and Patient Privacy standards,” and assisting with
billing practices. However, before the Government filed its
response, due to its discovery of a potential procedural defect,


                              4
we summarily vacated the contempt order and remanded the
matter to the District Court.

       The Government then filed a new subpoena that
repeated the demands made in the first subpoena. As the
government indicates, the “new subpoena was intended to
place the parties in the same position as the previous
subpoena,” and the request in the new subpoena was limited to
documents that had been subject to the initial subpoena.
(Gov’t Br. at 9.) The Government filed a motion to compel,
Appellants opposed, and the District Court held another
hearing, albeit a less extensive one given that the parties
agreed not to rehash the arguments they had made prior. The
District Court did, however, address Appellants’ new
submission regarding the fact that the Corporation no longer
employed anyone other than Doe and was now operated by
independent contractors.

       Despite this factual development, the District Court
granted the Government’s motion to compel and found the
Corporation to be in contempt, concluding (1) that even a one-
person corporation cannot assert a Fifth Amendment privilege
regarding corporate documents, and (2) the subpoena was not
overbroad in violation of the Fourth Amendment. The Court
found the Corporation to be in civil contempt, and entered a
sanction of $2,000 per day, which it ordered stayed pending
the outcome of this appeal.

                             II.

      We have jurisdiction over this appeal pursuant to 28


                             5
U.S.C. § 1291. We review the District Court’s decision to
quash a grand jury subpoena for abuse of discretion. In re
Impounded, 

, 312 (3d Cir. 2001). In so doing, we
exercise plenary review over the District Court’s legal rulings
and clear error review of its factual determinations. In re
Grand Jury, 

, 157 (3d Cir. 2002).

                               III.

A.     The Subpoena Does              Not   Violate   Doe’s   Fifth
       Amendment Rights

        The subpoena requires Doe, in his capacity as custodian
for his Medical Practice, to produce potentially incriminating
information. There is no dispute that, ordinarily, corporations
like the Medical Practice are not entitled to invoke the Fifth
Amendment’s privilege against self-incrimination. Nor is
there any dispute that custodians of records for corporate
entities are, typically, not entitled to invoke the privilege.
Nonetheless, Appellants emphasize that, as a sole practitioner
in a corporation with no other employees, Doe alone has
control over the content and location of business records.
They argue that, as a result, a jury will inevitably conclude that
he produced any incriminating documents, and that the
subpoena therefore violates his Fifth Amendment rights.
Because we disagree, we conclude that the District Court did
not abuse its discretion by refusing to quash the subpoena on
this ground.

       Supreme Court Precedent
       Appellants’ argument primarily hinges on two Supreme


                               6
Court cases: Bellis v. United States, 

(1974), and
Braswell v. United States, 

(1988). In Bellis, the
Supreme Court held that a partner in a law firm could not
invoke his Fifth Amendment privilege against self-
incrimination to avoid a subpoena seeking partnership 

. In so holding, the Court noted its “long line of
cases” adhering to the collective entity doctrine, which states
that “an individual cannot rely on the [Fifth Amendment]
privilege to avoid producing the records of a collective entity
which are in his possession in a representative capacity, even
if these records might incriminate him personally.” 

“Since no artificial organization may utilize the personal
privilege against compulsory self-incrimination, the Court
found that it follows that an individual acting in his official
capacity on behalf of the organization may likewise not take
advantage of his personal privilege.” 

The Court
noted its “consistent view that the privilege against
compulsory self-incrimination should be ‘limited to its historic
function of protecting only the natural individual from
compulsory incrimination through his own testimony or
personal records.” 

States v. White, 

, 701 (1944)).

        Despite the Court's holding in Bellis, Appellants
emphasize a particular paragraph from the decision, stating
that the “[Fifth Amendment] privilege applies to the business
records of the sole proprietor or sole practitioner as well as to
personal documents containing more intimate information
about the individual’s private life.” 

They assert
that the Court intended to distinguish between a partnership
involving multiple individuals, and a solo practice such as the


                               7
Corporation, where Doe, alone, has control over the content
and location of the business records. This is incorrect.

        In fact, as the Government argues, and as the remainder
of the opinion makes clear, the Court, in the paragraph in
question, is referring to unincorporated solo practitioners and
sole proprietors. After noting that individuals such as sole
practitioners may claim the privilege, the Court states, “on the
other hand,” that custodians of records of a collective entity
may not rely on the Fifth Amendment privilege to avoid
production they are required to make in their representative
capacity of that entity. 

As the Court explained, “In
view of the inescapable fact that an artificial entity can only
act to produce its records through its individual officers or
agents, recognition of the individual’s claim of privilege with
respect to the financial records of the organization would
substantially undermine the unchallenged rule that the
organization itself is not entitled to claim any Fifth
Amendment privilege.” 

Thus, the Court drew a line
between incorporated and unincorporated persons, not
between solo practitioners and multi-member corporations.

        Nor is there merit to Doe’s argument that, as a sole
practitioner, the Corporation is merely his alter ego. The
petitioner in Bellis had also asserted that due to the modest
size of his partnership, it was unrealistic to consider the firm
as an entity independent of its three partners. Soundly
rejecting this argument, the Court emphasized that the size of
the organization was immaterial, noting that “we do not
believe the Court’s formulation . . . can be reduced to a simple
proposition based solely on the size of the organization. It is


                              8
well settled that no privilege can be claimed by the custodian
of corporate records, regardless of how small the corporation
may be.” 

(emphasis added).

        Somewhat presciently, the Court largely dismissed the
distinction between professional associations and partnerships
for Fifth Amendment purposes, noting that

       [e]very state has now adopted laws permitting
       incorporation of professional associations, and
       increasing numbers of lawyers, doctors, and
       other professionals are choosing to conduct
       their business affairs in the corporate form
       rather than the more traditional partnership.
       Whether corporation or partnership, many of
       these firms will be independent entities whose
       financial records are held by a member of the
       firm in a representative capacity. In these
       circumstances, the applicability of the privilege
       should not turn on an insubstantial difference in
       the form of the business enterprise.

-01. In so doing, the Court placed professional
associations and partnerships on equal footing and took for
granted that, assuming aspects of the corporate form were
respected, the Fifth Amendment privilege would be
unavailable to custodians of such entities.

       It is therefore clear that, in applying the collective entity
doctrine, it is not the size or the type of corporation that
matters. Rather, as the Supreme Court has explained, to


                                9
determine whether an individual is entitled to invoke his or her
Fifth Amendment privilege, courts must determine whether
the entity in question is “an established institutional identity
independent of its individual partners,” and not merely a loose
informal association or some temporary arrangement. 

The corporation must “maintain a distinct set of
organizational records, and recognize rights in its members of
control and access to them.” 

And finally, “the
records subpoenaed must in fact be organizational records held
in a representative capacity,” such that it is “fair to say that the
records demanded are the records of the organization rather
than those of the individual.” 

is no serious
dispute that the Medical Practice, established as a professional
association in 1973 and operating as such for over forty-one
years, possesses an institutional identity independent of Doe
and maintains business records that, in no way, constitute
Doe’s personal papers. Bellis, therefore, undermines rather
than supports Appellants’ position.

       Appellants next rely on Braswell v. United States, 

(1988). There, the petitioner, Braswell, was president
and sole shareholder of two corporations. He also served as
those corporations’ custodian of records. The corporations
each had only three directors, and Braswell argued that they
were so small, they constituted nothing more than his alter
egos. Applying this logic, he attempted to resist a subpoena
by invoking his Fifth Amendment privilege against self-
incrimination. Specifically, Braswell relied on the Supreme
Court’s decisions in Fisher v. United States, 

(1976), and United States v. Doe, 

(1984), in
which the Court had seemingly strayed from the collective


                                10
entity rule and recognized that the “act of producing evidence
in response to a subpoena has communicative aspects of its
own, wholly aside from the contents of the papers produced.
Compliance with the subpoena tacitly concedes the existence
of the papers demanded and their possession or control by the
[individual producing them].” 

(quoting 

).

       Unlike the collective entity doctrine, which states that
the contents of the subpoenaed business records are not
privileged, the so called act-of-production doctrine is less
concerned with the nature of the entity that owns the
documents, and more concerned with the communicative or
non-communicative nature of the disclosures sought to be
compelled. 

109; see also United States v. Hubbell,

, 49 (2000) (Thomas, J., concurring) (act-of-
production doctrine “provides that persons compelled to turn
over incriminating papers or other physical evidence pursuant
to a subpoena duces tecum or a summons may invoke the Fifth
Amendment privilege against self-incrimination as a bar to
production only where the act of producing the evidence
would contain ‘testimonial’ features.”). Braswell argued, as
Appellants do here, that because only he had any authority
over the business affairs of the corporations, the very act of
producing documents contained testimonial aspects regarding
the existence and authenticity of the documents produced.

.

       The Supreme Court rejected Braswell’s arguments in
favor of a robust application of the collective entity rule, and
again declined to carve out an exception to the rule based on


                              11
the size of the corporation. As it had done in Bellis, the Court
noted the collective entity rule’s “lengthy and distinguished
pedigree.” 

“[P]etitioner has operated his business
through the corporate form, and we have long recognized that,
for purposes of the Fifth Amendment, corporations and other
collective entities are treated differently from individuals.” 

a brief survey of cases in this area, the Court
reaffirmed that the “plain mandate of these decisions is that
without regard to whether the subpoena is addressed to the
corporation, or as here, to the individual in his capacity as a
custodian, a corporate custodian such as petitioner may not
resist a subpoena for corporate records on Fifth Amendment
grounds.” 

       The Court in Braswell did, however, caution that
“certain consequences flow from the fact that the custodian’s
act of production is one in his representative rather than
personal capacity.” 

The Government is therefore
prohibited from making any evidentiary use of the “individual
act” against the custodian. This is because when the custodian
produces documents pursuant to a subpoena issued to the
corporation, he or she acts as a representative, and the act is
deemed one of the corporation, not the individual. 

It is permitted, however, to use the corporation’s act of
production against the custodian. 

by its opinions in Bellis and Braswell, the
Court has been steadfast in its conclusion that the Fifth
Amendment privilege against self-incrimination is unavailable




                               12
to corporate custodians.1 Having taken advantage of the
benefits of incorporation for over forty years, Doe may not
discard the corporate form simply because he now finds it
desirable to do so. See 

(noting that it is
of no import that the custodian, in producing corporate records
that are in his possession in a representative capacity, may also
personally incriminate himself).

       Despite the Supreme Court’s broad, and largely
unqualified, ruling in Braswell that corporate custodians may
not claim a Fifth Amendment privilege, it did, in a footnote,
leave open the question of “whether the agency rationale
supports compelling a custodian to produce corporate records
when the custodian is able to establish, by showing for
example that he is the sole employee and officer of the
corporation, that the jury would inevitably conclude that he
produced the records.” 

n.11. But
whatever circumstances were contemplated by the Court, this

       1
          Appellants argue that the Supreme Court has
demonstrated an increasing proclivity to extend a greater
degree of protection to corporate entities. See, e.g., Citizens
United v. Fed. Election Comm’n, 

, 365 (2010);
Burwell v. Hobby Lobby Stores, Inc., 

(2014).
Whatever merit there may be to Appellants’ general
observation, we discern nothing in Supreme Court
jurisprudence that suggests the Court has, in any way,
signaled its readiness to depart from its longstanding
precedent regarding corporate custodians’ inability to invoke
the Fifth Amendment privilege against self-incrimination.


                              13
footnote in no way detracts from its holding that a custodian
may not resist a subpoena for corporate records on the ground
that the act of production might incriminate him. 

        Moreover, we express serious doubt as to whether
footnote 11 in Braswell even applies to Doe’s situation. It is
hard to imagine a jury “inevitably” concluding that he
produced the records when the records were created while the
Corporation employed other staff besides Doe and while he
utilizes the services of independent contractors whose
responsibilities include “[m]aint[aining] accurate and complete
medical records, kept in accordance with HIPAA and Patient
Privacy standards” and assisting with billing practices. (App.
187.)

       Third Circuit Precedent

       Appellants further rely on our decisions in In re Grand
Jury Matter (Brown), 

(3d Cir. 1985) (en banc)
and Matter of Special Federal Grand Jury Empanelled
October 31, 1985 Impounded, 

(3d Cir. 1987). But
these decisions predate the Supreme Court’s ruling in Braswell
and do not adequately consider the collective entity rule’s
application.

       In In re Grand Jury Matter (Brown), we interpreted the
Supreme Court’s decisions in Fisher and Doe as “mak[ing] the
significant factor, for the privilege against self-incrimination,
neither the nature of the entity which owns the documents, nor
the contents of the documents, but rather the communicative
or noncomunicative nature of the arguably incriminating


                              14
disclosures sought to be compelled.” 

(quoting In re Grand Jury Matter 

)). Our decision in Matter of Special Federal Grand Jury
Empanelled October 31, 1985 Impounded relied on our Brown
decision and similarly applied this 

.

       The Supreme Court disagreed. While acknowledging
that Fisher and Doe “embarked upon a new course of Fifth
Amendment analysis,” it rejected the notion suggested by our
precedent that such analysis “rendered the collective entity
rule obsolete.” 

. Rather, it
concluded that “the agency rationale undergirding the
collective entity decisions, in which custodians asserted that
production of entity records would incriminate them
personally, survives.” 

result, to the extent our
precedents suggest that the act-of-production doctrine
somehow rendered the collective entity rule inferior or
obsolete, they were overruled by the Court’s decision in
Braswell.

       Precedent From Other Circuits

       Our conclusion today comports with precedent from
several other circuits that have considered the issue, all of
which have agreed that a corporate custodian may not refuse to
comply with a subpoena on Fifth Amendment grounds merely
because he or she is also that corporation’s sole owner and
employee. See In re Grand Jury Subpoena Issued June 18,
2009, 

, 158-59 (2d Cir. 2010); Amato v. United
States, 

, 53 (1st Cir. 2006); United States v. Stone,

, 912 (4th Cir. 1992), cert. denied, 

                              15
(1993).

       As the Second Circuit aptly explained, this result is the
“sensible” one.

       First, it prevents the erosion of the unchallenged
       rule that the [corporation] itself is not entitled to
       claim any Fifth Amendment privilege. Second,
       it recognizes that the decision to incorporate is
       freely made and generates benefits, such as
       limited liability, and burdens, such as the need
       to respond to subpoenas for corporate records.
       Third, it avoids creating a category of
       organizations      effectively immune           from
       regulation by virtue of being beyond the reach
       of the Government's subpoena power.

        In re Grand Jury Subpoena Issued June 18, 

(quotation marks and internal citation omitted)
(alteration in original). Indeed, as the Fourth Circuit noted, a
one-person operation “is still a corporation, a state law-
regulated entity that has a separate legal existence from [the
target of the subpoena] shielding him from its liabilities. The
business could have been formed as an unincorporated sole
proprietorship and production of its business records protected
by the privilege against self-incrimination.” 

. But the individual, like Doe here, instead “chose the
corporate form and gained its attendant benefits, and we hold .
. . that he cannot now disregard the corporate form to shield
his business records from production.” 

we find
Appellants have advanced no persuasive rationale as to why


                                16
the reasoning of Bellis and Braswell does not apply to one-
person corporations like that operated by Doe, we hold that the
collective entity doctrine applies to the Medical Practice, such
that Doe may not rely on the Fifth Amendment to avoid
compliance with the subpoena.2




       2
           Appellants argue that, in accordance with the
Supreme Court’s decision in United States v. Hubbell, 

(2000), they do not have to comply with the subpoena
because Hubbell recognized that compelled production of
documents can be testimonial to the extent the production
communicates statements of fact. See 

.     Appellants assert that because the Government’s
document requests require him, as custodian, to identify
sources of information, the document requests are more akin
to an interrogatory or oral deposition. Such production, they
continue, violates Doe’s Fifth Amendment.                  This
misconstrues the Court’s decision. First, there is no reason to
suspect that Hubbell altered, in any way, the analysis set forth
in Braswell. The Supreme Court did not mention, much less
revisit, the collective entity rule and cited Braswell only in a
footnote for the proposition that the act of producing
subpoenaed documents may have some protected testimonial
aspects.


                              17
B.     The Subpoena is Not Overbroad in Violation of the
       Fourth Amendment

     Appellants also argue that the subpoena was overbroad
and lacked particularity, in violation of the Fourth
Amendment. The Fourth Amendment “provides protection


        Second, Hubbell’s recognition that a custodian’s act of
production may contain protected testimonial aspects is not
necessarily at odds with Braswell. The Braswell Court
recognized the testimonial aspect of the act of production, but
found it an insufficient basis to override the longstanding
principle that corporate custodians are not entitled to resist a
subpoena for corporate records on Fifth Amendment grounds.
See 

(concluding that although
Bellis did not focus on the testimonial aspect of the act of
production, “such a focus would not have affected the results
reached” because it is “well settled that no privilege can be
claimed by the custodian of records.”) (internal quotation
marks and citation omitted). And, in an effort to safeguard
the these protected testimonial aspects, the Court placed
certain evidentiary limitations on the Government to prevent
it from using the custodian’s act in a subsequent criminal
proceeding against him or her.           See 

Accordingly, we conclude that Hubbell does not provide a
justification for Doe’s refusal to comply with the subpoena.
See also Armstrong v. Guccione, 

, 98 (2d Cir.
2006) (rejecting “any suggestion that Hubbell so undermined
Braswell that we are no longer compelled to follow its
holding.”).


                              18
against a grand jury subpoena duces tecum too sweeping in its
terms to be regarded as reasonable.” United States v. Dionisio,

, 11 (1973). However, the Supreme Court, in
remarking on the “unique role in our criminal justice system”
that the grand jury occupies, has noted that as a “necessary
consequence of its investigatory function, the grand jury paints
with a broad brush.” United States v. R. Enterprises, Inc., 

, 297 (1991). Moreover, grand juries’ powers must be
broad, given that “the Government cannot be required to
justify the issuance of a grand jury subpoena by presenting
evidence sufficient to establish probable cause because the
very purpose of requesting the information is to ascertain
whether probable cause exists. 

no case law, Appellants seek to cast the
subpoena as overly broad because it “sweeps within its
purview documents and information with no possible nexus to
the stated investigation.” (App. Br. at 34.) They argue that its
request for information relative to third parties having nothing
to do with the OTE is impermissible. We disagree.        The
Supreme Court has cautioned that “the law presumes, absent a
strong showing to the contrary, that a grand jury acts within
the legitimate scope of its authority.” R. Enterprises, 

. And, where a subpoena is challenged on
relevancy grounds, as Appellants do here, “the motion to
quash must be denied unless the district court determines that
there is no reasonable possibility that the category of materials
the Government seeks will produce information relevant to the
general subject of the grand jury's investigation.” 

As the District Court noted, arrangements between the
professional association and third parties could be disguised


                              19
kickbacks and patients’ records might reflect that blood
specimens had been impermissibly ordered or taken. Under
these circumstances, the District Court did not abuse its
discretion in concluding that the category of materials
identified in the subpoena could reasonably produce
information relevant to the Government’s investigation.

                          IV.

      For the foregoing reasons, we affirm the District
Court’s order entered on November 20, 2014.




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